I bought my 2000 Mazda Protégé days after I moved to Ottawa from Toronto. My Mazda was brand new, right off the lot. I recall I paid about $16,000 for the car back then. I used my credit card to make a $500 down payment and drove the vehicle to my house the day I bought it. I remember paying about $300 per month to kill off the loan which I finally slayed in 2005. I’ve owned this car ever since.
Looking back, I would have done some things differently if I was going to make the same purchase today but that’s life. You live and you learn. One of the things I wouldn’t change is keeping this car – as long as I have – this has been a good long-term decision.
Here’s why I still drive my 14-year-old car…
- It still runs fine. Yes, I need to pump some maintenance money into it now and again but as a secondary commuter car, it does the job.
- It doesn’t owe me anything. Over the years I figure I’ve averaged about $200 per year in maintenance costs. In the early years, I just needed a $30 oil change twice per year. In the last couple of years, seems every six months, the car needs about $500 worth of work. Hopefully most of the major repairs are done for 2014.
- I save on insurance. While auto insurance premiums have been on rise I know for a fact I’m saving money over a newer vehicle. I currently pay about $80 per month to insure this car.
- I still get great gas mileage. I don’t use my car very much, especially in winter, and even when I do I can usually get about a month’s worth of travel from my $50 fill-up.
- We already have another car payment – one car payment is plenty. We purchased a new vehicle in 2011 and those payments will continue until 2015. We hope to own that newer vehicle for another 10 years after that. With two car payments we could not contribute to our RRSPs and TFSAs like we do.
- I don’t care (very much) about the car I drive. I’m convinced I’m bringing down the property value of my neighbourhood so I keep my car in the garage, out of sight and away from Mother Nature. At this point in my life I’m more concerned about saving and investing to achieve financial freedom than driving a hot car. Maybe when I realize financial independence, I’ll treat myself to a slick ride.
- I’ve learned that money borrowed to buy a depreciating asset (a car) is really dumb. If you’re going to borrow money, use that money to buy assets that will appreciate with time.
- Keeping this car gives me time to save for a new(er) car. I won’t be using my credit card again to make my down payment (*sigh*), I’ll use savings this time around. If things work out, I hope to have about $5,000-$10,000 saved for my new(er) car purchase in 2016.
I’m proud to have owned this car for as long as I have and intend to keep it for a few more years. You can really become attached to vehicles. As long as it runs, it doesn’t cost much to do so and it keeps me safe, I can’t ask for much more.
How long have you kept a car on the road? Do you have a vehicle older than a 14-year-old car in your driveway? Share your story.
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
I must say you have maintained it very well, it’s looking pretty new for a 14 years old car.
Money 4 cars will buy your car for scrap regardless of whether it is a non-runner, an insurance write-off, damaged, flood damaged or unroadworthy and whatever the make, model, age or condition.
Well thanks 🙂
Thanks for Sharing
1995 Toyota Tercel. Still in great condition even with just over 200K on it. No problems, just regular oil service. This is actually a bit of a bother as I would like to get something bigger like a Forester but this little car is so fun to drive, economical, nimble and fits my wife’s short legs.
Wow, 1995? Got me beat! Well done. Unfortunately my car is coming to an end. Likely next year to replace it. Thanks for reading.
This is a great article Mark.
I drive 2007 Honda Accord 4 cylinder.
I purchased certified pre-owned & have owned this car for about 4.5 years and have worked out the total maintenance/repairs cost thus far, excluding gas.
Total cost for me would also include gas/insurance/automobile road service, yet I’m just interested in how reliable my car has been vs. others with similar vehicles.
2016 was the worst being a particularly pricey year due to wear/tear items needing replacement
Although, total maintenance & repair cost / 4.5 years = ~ $1,200 per year – Canadian) (~$900 U.S.)
I suppose that’s not terrible and certainly is less expensive than laying out cash for another pre-owned car and starting over, eventually doing the same repairs more or less.
We consider a ten year old car a new car in our family 🙂
Good one 🙂
Thanks for sharing. I think for our next car I’ll buy a 2-3 year old car ideally under 50,000 km on it. I’ve had bad “car years” as well when my cars cost more than I would have liked with repairs and such, but such is life!
Thank you for this awesome post and useful information..
Hi Mark and MrC,
You guys are really sharibg very usefull info about old cars that most peoples want to get rid of in no time.
Driving a 1984 Car is awsum, you are really taking great care of your car by spening alot if time and money on it.
Thanks for reading and commenting Zaib! Enjoy that old ride for as long as you can.
I’m impressed by what you are doing. Keep it up, keep it going. It’s always a pleasure to see new stuff coming up like this.
Great share and thanks once again.
Thanks!
The newest car I personally own is actually a 2001 Protege. They are nice little cars. I have always owned and operated older vehicles, and I’ve noticed that the increasing costs of maintenance as the car ages is only temporary. After 10-15 years parts start wearing out that most people never have to replace, because they only drive newer cars with monthly payments. So for a while the maintenance costs increase as you’re needing to install new struts, wheel bearings, brake calipers etc…However, after those big (and expensive) parts have been replaced, it will again become smooth sailing. With an older car you just need to clear that maintenance “hump” and the next 5 years or so you can keep on truckin’ for very little money.
My other vehicle is from 1984 and has 300k miles (480k kilometers). Yep, she just turned 32 years old and is still going strong. Now, truth be told the maintenance on that one is getting pretty bad, but at this point I am just trying to see how much life you can squeeze out of a car. My wife drives a 2007 vehicle we bought cash in 2012. We paid less then half for what that thing costed new, and have had very little maintenance since it’s still relatively new. I really do not understand why people would buy a brand-new car.
2001 Protege – nice!
That’s the same with my car: new struts, wheel bearings, brake calipers etc…done that… Hopefully nothing major to come!
That is VERY good, your 1984 car. Wow. You’ve got me there.
Well MrC, I have an update coming about my car this spring so stay tuned. Looking for reader input. Thanks for reading.
Great post!
We own a 1993 Ford Telstar Tx5i and have done so since I asked mum if I could borrow it to learn how to drive a manual (8 years). She bought it brand new off the lot in 1993 which means it’s been in our family for 23 years! We’ve clocked up 340,000kms during that time and other than the usual servicing and maintenance cost, has only recently started costing for worn bits and bobs. But when these occur I don’t mind spending the money because she’s worth every penny. We know her history, which is not always the case when buying other second hand cars, so all issues are just wear and tear. We now live 65km from work and I still use her for work most days, which can feel rather cruel but necessary. I’m proud of our car and am very attached. I considered passing it on but couldn’t bear to see her die at the hands of another. I’ll keep her til she dies cos I’m too attached.
23-year-old car? Wow. Nice work. I don’t know if I’ll have my 2000 Mazda for 23 years but I’ll likely keep it until it costs me too much to maintain it and keep it on the road. Thanks for sharing – good story Haley.
Cheers,
Mark
I still drive my 15-year-old Honda Accord…mainly because I don’t work full-time and can’t comfortably afford to replace it yet. It’s got 243,000km and runs like new, after its most recent trip to the shop. I plan to replace it in the next year or so, but it’s my first car, so…we’ll see. It’s hard crawling along the Gardiner in a heat wave with no air conditioning…but I love the simplicity of the audio and temperature controls. I recently drove my mom’s 2013 Accord and I basically needed to take a course to learn how to use its computer interface while driving! So I’ll be avoiding any unecessarily-computerized vehicles when I buy my next car.
That sounds like a great car that has served you well. My Mazda is very basic so there is less stuff to go wrong with it. Knock on wood – I’m doing my drive clean test this morning!
Another great post Mark!
I drive my 14 year old Subaru Forester for all the same reasons you listed for continuing to drive your Mazda. I bought the Forester new while I still lived in Toronto. I now live 800 km further north and have put 282,000 km’s on the old Forester with no major bills-it even has the original muffler and exhaust system!
We have a 2011 VW Golf TDI that my wife uses for her daily drive to work.
Since I am semi-retired we now use the Subaru primarily to shuttle our three dogs to hiking destinations. It is hard to justify replacing the Subaru given what we use it for.
That Subaru sounds like a great car and something that has given you lots of service over the years. Hard to go wrong with such a durable ride.
I purchased an 1989 Honda Accord new for 17K cash and still have it to this day.
Its been a 2nd car for the past 6 years (the newest being a 20yr old SUV 🙂 and I don’t drive it much anymore….just sporadically during the summer months.
Its been very reliable over the years and I’ve kept up whatever maintenance was needed.
It also has just over 200K on it which helps extend its life.
I’ve calculated the total cost of ownership over the 26yrs (I have all receipts) to be about 31K (including the original purchase price of the car).
I don’t think I’ll ever buy a new car again.
I think I overpaid for my 2000 Mazda then, for about $16,000 😉
Those Accords are great cars. I don’t mind buying new as long as 1) we get 0% financing and 2) we intend to own the vehicle for at least 10 years, ideally 15 or more.
Hi Mark! I am late to this party-but was researching about my little gem – also a Mazda Protege a 2001 ES…I found this car in March of 2013 when the 2000 Civic with 332,000KM’s on the clock died, (which I bought for $2500 and drove for 3 yrs). I made the deal on the ’01 Mazda that the dealer wanted $2600 for that they would take $300 off the ask price and give me $300 for the Civic no matter if it drove, was pushed or towed to their lot (despite a thrown con-rod or similar – it drove there!)…My best cars have all been used cars, (three Civics and this Mazda which was 12 yrs old when I bought it and only avg 12,000km per year). My worst cars have been German cars – 1 brand new VR6 Jetta and a used Audi S4 from Texas – but that’s a fun story in itself. I had the S4 and Mazda – both were silver, 4 doors, had power windows, locks, sunroof, remote, tilt, alloys etc…The Audi with 344hp could pass almost anything except gas stations…I found I got way more ‘smiles per gallon’ in the Mazda so I sold ‘The Beast’ and contributed to my RRSP and couldn’t be happier. My goal is $1000/yr ownership cost, (not counting wear and tear items or fuel). My best vehicle was a Civic Si that cost $333 per year for three years. Believe it or not, my cost of ownership was still less than $500/year for the Audi but the fuel costs and overall cost of ownership would have crushed those numbers had I kept it instead of flipping a great original purchase price. A friend of mine has had a Toyota Tercel since new in ’98 and she has 420,000km on it, (it just past its emission test today as a matter of fact!). She has been able to maintain a sub $1K/yr cost of ownership also – but I think it is harder to do with a brand new car than finding a well loved used gem. Plus, you can have more car variety buying more used cars-like the disposable car reader suggested earlier. For some, the hassle of searching for the right used car is a pain-for me it is a love/hate search. While I have friends and family who regularly flip their $40 and $50k vehicles for big losses ($5k+/year cost of ownership), I will prefer to buy great used cars and know I am saving real $ as well as enjoying the hunt for automotive gems – btw – apart from the rust prone rear wheel wells that test my body work/paint skills – what a fun little car!
I think that’s a great goal: $1000/year for car ownership excluding fuel and maintenance is good. Geez, if you can average that for your entire life, you’re doing very well! I hope to keep my 2000 Mazda for another couple of years. I also see folks flipping $40k cars. I don’t get it. That’s certainly not me. Everyone is different I guess! Thanks for the detailed comment Kirk.
I will keep this reply shorter-just some quick math and an update:
Sadly the 2001 Protegé finally went to the auto recyclers June 2022 so 9 years and just shy of 300km. Purchase price not including tax $2.3k (not counting $300 trade)… recyclers gave $500 for Protegé with steel rims-will sell alloys later to lower overall cost. $200/yr not counting fuel/insurance/routine maintenance…was a great little car-still drive to recyclers…engine perfect-no leaks.
Current vehicles 2006 Sentra purchased for $1k in 2020 so already at $333/yr (not a as good as the Mazda IMHO-would recco Corolla or Civic instead) and 2009 Toyota Tacoma $12k in Dec ’21 (this will be a challenge to get under $1k/yr)…but it is a 2.7 5spd 4×4 that makes money most everyday.
Great update, Kirk!
That’s frugal! re: 2006 Sentra purchased for $1k in 2020 so already at $333/yr (not a as good as the Mazda IMHO-would recco Corolla or Civic instead) and 2009 Toyota Tacoma $12k in Dec ’21 (this will be a challenge to get under $1k/yr)…but it is a 2.7 5spd 4×4 that makes money most everyday.
Nice.
Mark
In the past I’ve bought used cars (1-2 yrs old) and drove them until they died – usually 10-14 years.But found my car lifetime annual cost was running $2,000 not including loan interest as I paid cash. I also dislike dealing with garages and their overcharging so have settled on the following cheaper path: I buy a really cheap, old, good used car (at least 6 years old), put extra liability and zero collision. Usually pay $1,000 and drive it until it dies. I will only put gas and oil into it. My most expensive car was a dirty 03 Chev I bought in 09 for $3,000 (still running in 2015 so my annual cost is now $428 and falling. If they last a year I’m happy, every year extra halves my yearly cost on the car. The insurance runs just over $50 per month. I usually get 3 years out of these cars so my annual cost averages $300. It is also great with 4 teenagers driving as the insurance doesn’t put me in the poorhouse. Make sure I have CAA too. I’ve had an 93 Escort, 94 Tempo, 88 Mercedes, 82 Corolla, 89 Mitsubishi all about $1,000. I call it my throw away car. Also in BC you can crush a car and the Province will give you $300 so that also lowers my cost.
That might be my plan for the next car Virginia; buy a 5-6 year old car and drive it into the ground. I hope to pay cash for the next car but that might take about $5k in savings which we don’t have now.
Thanks for your comment and reading my post.
bought my 2001 mazda protege last year with 175,000 kms. i was advised not to buy an old car because it would cost a lot to maintain than a newer car.
It now has 200 k and is still running great. I feel a newer car would cost a lot more to maintain.Assuming i had serviced my new car at 5000 kms interval at the dealership , it would probably have cost me $100 per service ,i.e $ 500 to maintain + more expensive to insure + monthly installments. So far, I just had two oil changes @$25 each at a cheap garage. Sure the newer car would have given more gas mileage but overall it makes a financial sense to drive an older car.
Nice stuff Moon. I think as long as you take good care of it, that Mazda should last another 3-5 years. The engines are good in them. I think it makes great sense to own an older car for as long as possible.
I just bought a new car. TDI Passat.
My intention is to keep it to 400,000 K
I worked the numbers out: longevity (vs gasoline engine) and fuel economy versus buying used and buying a new car didn’t really cost me any extra money… In fact, over ten years the Passat at 60 mpg will save me 19000$ in fuel vs a average sedan at 35 mpg.
Everyone’s situation is different I would like to think I could go back to the days of buying used and keeping them for 10-15 years, but it’s simply not in the cards with my current driving habits.
nice article
400,000 K would be great for any car. My 14-year-old car has about 200,000 K on it, not bad, and I hope to get another few years out of it. I figure if you can get 15 years out of a car, in our Canadian winters, that’s pretty darn good.
I have a 98 Camry XLE… 150k miles and still is wonderful. The trunk handle is a bit rusty though 🙁 But that’s the only thing… Almost. Ok, the car doesn’t look exactly new but I haven’t had a problem with it ever, actually.
V6, but I still manage an average 33 MPG.
Give a proper maintenance and service to the car,no matter about the age of the car.auto repair is the most important thing so that we can save our money and reduce the cost of maintenance and also maintain a good working condition.
Auto maintenance is very important, fully agree Ronald!
Wanted to sell my old SUV from college since my daughter refused to use it. My friend suggested Joliet-U-Pull-It and I was very satisfied! the process was easy and the workers were friendly. I’ll definitely be recommending them to anyone looking to sell an old car! Oh and they have a helpful website too! http://jolietupullit.com/
Well I can understand because I have been doing the same, using my old car and saving for the new 🙂
I think the performance of a car depends on the maintenance and nobody else can maintain your car as gracefully as you can. This is the reason why even after 14-15 years, the performance of such car is phenomenal. All about love and care you initiate for your car from the very beginning. Thanks for sharing wisdom through those amazing tips. Glad reading!
1993 Honda Del Sol. Second owner, bought in 1999 for $3500. Minimal maintenance and drives like new with 190K on it. Decided to restore the body last year so even looks like new now. Can’t see it will ever actually stop working.
Nice!
My Mazda has almost 200K on it. I hope to keep it running for another 2 years.
200K is low mileage in my view…lol
Indeed. Used to drive it all the time, now, as an older car, not so much.
How much did it cost you to restore? Where? Was the body badly rusted out? Who is the mechanic
My 1986 BMW 325 is still going strong. Needs some exhaust work now but it runs like a top and everything works including the sunroof. Unfortunately I have not owned it since day one but if I had it would be in even better shape!
1986? Now that’s impressive!!
Some very interesting comments on this article! A couple of commenters made note of tracking their cost of repairs and/or upkeep.
Would anyone know of sites where vehicles are rated by their annual maintenance costs? My guess, from personal experiences & by word of mouth, would be Toyotas & Hondas would fair the best in this regard.
Hey Bernie,
Yes, some interesting comments for sure. Some folks are very diligent about tracking their expenses and forecasting maintenance costs, pretty good stuff!
I don’t of any sites myself Bernie but I would say those brands are probably on the lower end of maintenance costs. I know my Mazda over the years has been low-cost in that regard.
Awesome post Mark! I have a 2003 Ford Focus, it’s lemon yellow and I bought it used (4 yrs) when I got my job right out of college. I love this car. It’s the first big purchase I ever made; the body is in great shape despite not having a garage to park it in and the colour makes me happy every time I look at it! (talk about being attached to your car!)
As with you though, just recently I’ve had to sink about $1200 into it over 3 repairs so I decided that I would create a spreadsheet that listed all the major repairs I’ve made from the month I paid it off and basically ammortize them over the number of months since I’ve paid it off (about 24 months now). So when I have a major repair I add it to the running total and update the number of months. My car payment was $241/month for 5 years, right now the repairs are costing me an average of $87/month and I’m putting $280 into a savings account towards emergency repairs and a downpayment on a new car eventually.
Every once and a while I look at a few snazzy, white, hard top Jeep Wrangler Sahara’s driving around my town and think I could look pretty awesome in one of those! But then I look at my car and think, nope! I love this car and it get’s me where I need to go while still be easy on my wallet! I plan to drive it for another 2 or 3 years at least OR until I get a quote for a repair that would push the cost/month close to what I was paying as a car payment. (Exact threshold hasn’t been decided yet 🙂 )
Cheers!
Mel
Thanks!
My parents were great to give me an old Plymouth Sundance to use for my very first car in Toronto. I took good care of it until I got into a small accident and tore up part of the suspension. I was never attached to that car but I am attached to my Mazda. It will be tough to see it go. Hopefully I have another 2-3 good years with it though.
Smart of you to save for repairs in advance and down payment on a new car. I need to start our new(er) care fun in 2015. That will be one of our financial goals in 2015 I think. Need to get through our 2014 goals first and talk to my wife about some plans; see what’s on her wish list.
Continued success!
i am enjoying reading all the comments about mark’s 14 year old car. remember; if you keep it 20 years it becomes a classic and then you can sell it for big bucks!
Ha, not sure it will last that long Gary, but we’ll see!
Hey Mark, you’re saying you car is 14 year old, but after running for 14 years it is surprising that you’re still getting good gas mileage, I am having the same and mine is 11 year old but now the gas mileage with the v6 motor has dropped significantly 🙁
Good luck with your car. 🙂
Thanks Mike for the luck, you never when I’ll need it. So far, good gas mileage…fingers crossed.
Good article. I bought my 1999 Toyota Corolla in 2006. It had 122K on it. It hasn’t required any expensive repairs, is inexpensive to run, is cheap on insurance and is still in fantastic shape at 180K. I plan to drive it as long as I can. It doesn’t owe me anything.
Corolla are a great lil’ car. My parents had an older one for many years and have a newer one now.
This is my 2nd Corolla. I’ve also owned 2 Camrys. All were excellent cars.
I drive a 2003 Subaru Impreza, which we’ve owned since new. Currently has 380,000km on it. All in it costs $0.2518/km to drive, that’s insurance, maintenance, gas, car cost, any financing, etc… basically all in. We also have a 2004 Toyota Echo hatch, again owned since new, 300,000km. all in it is $0.188/km. I track cost per km to know when the cross over point of the car costing more than it has been worth over time occurs, which will signal me to buy a new car. – Cheers.
Phil, that’s intense. You track the costs of your cars to drive per km? Impressive, I learn stuff from readers like you all the time.
Mark
yes sir. I’m a little OCD. I think it’s the engineer in me. Learned a while back this was a good way for me to optimize car costs and definitively know when the car is actually starting to cost me over having a replacement. I’ve been looking at the 2014 Forrester’s…. I’m thinking another year or so and the old Subie will need to be retired. As to the echo, I have a friend whose 2003 version has 780,000km on it, and still going, so I think that one I’ll have around for a while yet. – Cheers.
A little, funny. It is a good way to have a baseline for running costs, kidding aside, just not convinced many would do the math on that stuff.
My sister had an Echo and drove it into the ground. It didn’t make 300,000km but not sure she took great care of it. Hopefully she doesn’t read that? I figure if I get 16 years out of my car, that’s pretty darn good. It only has 200,000km on it.
Good luck with the vehicles Phil, sounds like you have things well under control.
Still driving my 2004 Civic. I keep it in the garage for the same reasons.
Nice. How long do you plan to keep it Zach?
I wish some of my neighbours would leave their old cars in their garages like you do! Haha. I plan to drive my car for at LEAST another decade. It’s a 2008, and it runs great.
My old car is a bit tired looking. I don’t want to bring down the property values 🙂
You would all have me worried if my car with 20 years of experience didn’t fit right in around here 🙂 It’s a bit of a mixed area so there’s old cars next to Escalades. In my old neighbourhood it was a bit out of place among the massive trucks and SUVs. The only reason I kept it in the garage was to avoid scraping snow and ice off of it though.
Same, there are some nice cars in my area as well. So, the garage not only allows me to hide my old clunker but I don’t need to clean off the snow and ice in the winter 🙂
Thanks for the comment Richard!
Hi: A very experienced mechanic told me it’s not unusual for a Toyota Corolla to still keep going well at 300,000 km. He said he’s seen a few with 400,000 km. Mine has over 200,000 km. now, and no problems yet. Of course, some rust spots are just now starting to show up here and there, which I may have fixed, just to keep the car looking nice.
I think you’re right Helen. I’ve seen many older Toyotas still on the road in Ottawa as proof of that.
The salt and the sand in the winters shortens the life of the cars here (more than Toronto) though. Hopefully you keep it running for years ahead.
My husband drove his Volkswagen Jetta for 18 years and it was used for a daily commute as well as being the main family car. Currently I own a 2007 Jetta and my husband has a 2011 Golf. We will drive these cars (hopefully!) till they reach the ripe old age of 18 or more.
18 years…wow. Impressive stuff Sharon. I figure the more I can sock away into my RRSP and TFSA vs. a car payment, the better.
Mark,
Nice job on keeping the old car. Drive that baby until it quits on you.
I have a fairly new car by my standards – a 2006 Corolla with 21k on the odometer. But I only have this because it was a steal at $5,400.
I actually quite miss the days of riding my scooter and using the bus to get around. Those were the days with no insurance bills, and fuel was only about $10/month.
But I plan on keeping this Toyota till it drops. Hopefully I get another 10 years out of it or so, at which point it’d be 18 years old! 🙂
Best wishes.
Thanks Mantra. A car is safer than a scooter 🙂
Based on where you live, you take good care of the car, regular oil changes, etc., that Toyota might last 20+ years.
Imagine all the stocks you will buy in the meantime.
DM,
Good choice of vehicle & incredible price! With only 21K you’re averaging 2,625 km per year. It should last 100 years at that rate 🙂
Completely agree with you Mark. Hubby drives a 2001 Toyota 4Runner and it only has 120,000 km on it (on average he only puts on 10K/year commuting to work). The car’s still in great shape with the exception of a couple of rust spots and he uses it to transport his dirtbike when he rides in the spring and summer with his buddies. I noticed your monthly insurance is $80? No offense but that seems kind of high for a 14 year old car? I’m sure you’ve shopped around though. We pay $110/month for TWO cars – the 2001 4Runner and a brand new 2013 Dodge Caravan. My parents pay $75/month for a 2006 Honda Civic.
i was wondering about that insurance premium as well. seems pretty high mark unless its for both your autos?
Well, my Mazda has a number of rust spots! It rivals my buddy’s Neon he used to have in Toronto.
Yeah, my insurance is just $80 per month and it’s bundled with our other car and home insurance. That’s with a $1,000 deductible. Rates have really gone up in Ontario in recent years and I will continue to shop around.
$110/month for TWO cars??? Geez, that’s good. I wonder if insurance rates are lower in Alberta?
http://digitaljournal.com/article/353176
Thanks for the comment and keep up the great work on the dividends. I’m sure you are cheering for IPL.UN and PPL.UN.
i drive a 2007 gmc sierra diesel because we pull a 5th wheel in retirement. we have had it since 2008 (6 years) and now it is dollaring us to death. my mechanic says diesels are expensive to maintain and boy is he right. we have decided to leave the 5th wheel down in myrtle beach and trade/sell the truck when we get home but by the sounds of the posts today we will look at a 3/4 year old honda/mazda/toyota because we like to keep our vehicles at least 10 years. our only thought is that we should keep the diesel as the engine and transmission are excellent and it only has 210,000 km on it. the trouble is it only gets 23 miles per gallon and we want something in the 30 mpg range. any thoughts out there?
Diesel prices have really gone up. Probably a good idea to leave the 5th wheel in Myrtle. I wish I could give some advice about fuel efficient trucks but I can’t Gary. Are there hybrids available?
A couple but their towing capacity is too low. Diesel prices are almost 25% higher than gas down here but still lower than home. ( diesel .90/litre, gas .75/litre)
I would reconsider not paying as much as you can with a good cash back credit card like the Scotiabank momentum cards, as long as you pay it back the same month 🙂
Hi: I’m with you on this. I drive a 1999 Toyota Corolla (white, with black tinted windows). I bought it used from a rental car company, and I got the car’s maintenance records. The car was very regularly maintained by a garage I know and trust. I keep it because of all the reasons in the article, esp. low insurance rates. I hope to keep it for maybe another 3-4 years, perhaps more. Next, I would buy a gently used Toyota again. (This is my 2nd. Toyota.) .
To me, a car is not an asset, but a liability. I always think, if I invested the value of a nice USED car, say $10-15K, how my funds would appreciate if invested well. My priority is to invest in my portfolio, not a heap of metal with wheels.
1999 Corolla? Nice. My good buddy in Toronto drive a Neon for years. He’s pretty good with managing his money.
I see your point Helen about a car being a liability – the fact you have ongoing operational costs – insurance, maintenance, gas, etc. makes it a liability for sure.
I’ve changed my tune about cars, I always wanted to buy new but now, I just want something good and reliable. That doesn’t have to be new and if I buy new again, needs to be 0% again, and with lots of free toys (snow tires, etc.). Cars are not a great asset whatsoever.
I’m getting better at this. Used Toyota Tercel for 7 years, New Ford Escort GT for 9 years, new Mazda Miata almost 13 years and counting. That’s 29 years, 3 cars. Think of the savings!
That’s impressive, only 3 cars used over about 30 years. I need to Tweet that.
A single car family and we’re 6+ years in to our Audi A4 that I plan to drive for at lest another 5-6 years. I expect we’re further into our financial journey than some of you here, but share similar ideas. We paid cash for this car
A4 are a nice ride. My sister-in-law has one. Unfortunately she hasn’t asked me to take a tour in it yet so maybe this spring I will have to ask for the keys 🙂 I wonder if she is reading this…
I just recently retired my 97 escort. What a great car it was. I bought us used in 99 and drove it for another 200,000 km.
1997 Escort? Wow. Solid work 🙂
97 Escort? I have a 98 Escort. I guess I can expect another year out of it…
I bought it used at in its fourth year at about half the price its first owner paid.
Nice work Wendi1! That’s pretty impressive to keep that on the road.
Bought a Toyota Corrola in 2006, i paid a total of $24,000 counting interest. Since then, car price have gone down and so did interest rates… I plan on keeping that car for something like 12 years or if my needs change (for example if I have kids). In 8 years, I only have 120,000 km on it (I bike or bus to work and often use my bike for moving around in the summer, including groceries). Given the price of a new car and given my yearly mileage, the thing I would have done differently would have been to buy a used car. A 3 year Corrola with 60,000 km on it can be found for something like $12,000, half of what I paid. I think I would have been better of to pay $12,000 for a car I use 9-10 years than $24,000 for a car I use 12-13. It’s highly probable that my next car will be a used one, something like 3 years old, and that I’ll pay for it in cash.
Another Corolla owner. They are a popular and reliable car for sure…
Only 120,000 km for an 8-year-old car? That’s good.
Yes, I’ve read a number of reports/articles that say a 2-3 year-old car is the “sweet spot”. Nearly new, still warranty and much cheaper for the points you’ve raised Francois. I am strongly considering this route for my next car when the Mazda goes. Hopefully I have until 2015 or 2016 with this car though. Fingers crossed…
Great post Mark. We are in total agreement on this subject. Paying tons of money for a depreciating asset isn’t a great idea. I actually wrote a post on the math behind car purchase a couple weeks ago http://awealthofcommonsense.com/investing-contest-picking-worst-investment/
I just read your article Ben, nice stuff. This was good “According to Edmunds, a new car loses 11% of its value the moment you drive it off the lot. After the first year a new car depreciates by about 20%.”
True and depressing at the same time.
This is where a new car makes sense: 0% financing, you pay the car off within 5 years, and keep the vehicle at least another 6-7 years after that. This is what I have done with my Mazda and I would consider doing it again, except no downpayment with my credit card.
Part of the reason that a car loses a lot of value the day after you buy it might be that no one sells it after 1 day unless there is a serious problem 🙂 If you think long-term it can still make sense to buy a new vehicle.
i had to buy a car last year so I found one that cost less than my monthly spending. The downside is that the annual insurance costs half as much as the car! But it could be in the right age range to see a little appreciation over time if I replace the most worn-out parts.
Richard,
Interesting point about day 1 with the new car. Like investing, long-term buy and hold works for a car as well.
Thanks for the comment!
Great article and one that I truly believe that more people need to read! We need to get the word out that cars are “Wealth Destroyers” rather than wealth builders, despite the false appearance of wealth that they may give to others.
Wealth destroyers is right Dan, unless of course, you have some money to burn and have fun with!
Great post! Still driving my 2003 Corolla. That baby is bulletproof. I still get the odd pang and go on Auto Trader ever now and then……to fantasize. When I listen to my friends complain about their cash flow knowing they have 2 leased foreign SUV’s, I quickly come back to my senses!
Corolla’s have some major staying power. I recall my parents had their car for about 12 years.
I think spending tons of cash on cars is a waste personally, although I can appreciate having at least one reliable, decent car in the yard.
Thanks for sharing your story Joe!
Ha, you beat me to it. My car is 13 years old.. I will drive it until it stops driving at all. I see absolutely no reason to spend $30,000 on a new car today, which will lose a large part of its values over the next few years. Instead I can use that money to easily generate $100/month in growing dividend income for life.
We struggled with buying our most recent car. It wasn’t $30k but it was over $20k, so there were some opportunity costs there. When you think of investing for “income for life” vs. spending money today, it really puts things in perspective. A future blogpost 🙂
I love the idea of keeping a car that long. We bought our Toyota new in 2008 and plan to keep it for at least 10-12 years. Another benefit aside from lower insurance costs is that fact that it is less of a target for thieves. Most would rather target a new and flashy vehicle than an older one. We only have one vehicle for now and would like to keep it that way for as long as possible. Only having one vehicle and keeping it for a long time will allow us to save more – RRSPs, TFSAs, mortgage pay down – all better options than buying a new vehicle
Yeah, kinda forced to keeping my car this long Dan. I have no money to spend on a new car 🙂
Only having one vehicle will for sure, allow you to sock money away. All better options that buying a depreciating asset!
I bought my car in 1999! So it’s 15 years old. It’s not a Toyota…but related. It’s the Lexus…the RX300. I still love it. It looks great (to me:) and drives great. Very little maintenance especially compared to the Ford Taurus I had before. I couldn’t be happier (except with the turning radius…ha).
15 years, geez, that’s good. I’ve seen a few older Lexus on the road. They seem like a nice car and they definitely look much nicer than my rust bucket. Thanks for the comment!
We purchased a 2010 Lexus RX350 a couple of years ago. By getting a used one from the dealer we saved over 40% off the new price and the goal was to drive it until 2025. The fact that Lexus, and the RX are stalwarts on the quality lists led us to go this route rather than a new car from a non-luxury maker, or a used German luxury car.
We were able to pay cash for it by being careful with our vehicle purchases in the past; driving cars for 14 years, and buying used replacement cars on the cheap from friends and family who wanted upgrades. Some people questioned the wisdom of driving a 14 year old Escort, and replacing it with a 12 year old Tempo – but it worked.
Hey Dan,
If I can ever afford a good car, I think I’ll do the same as you – purchase a used one from the dealer; save a bundle but get some toys with it such as navigation, heated seats and steering wheel, etc. Lexus from what I understand make a very quality car.
I don’t mind having a 14-year-old car, or even 16-year-old Mazda in a couple of years as long as we have one good car to rely on.
Thanks for your comment.
I have a 1999 Mercury Cougar. Just less than 90km on it. If it wasn’t for my own stupidity (and courtesy) years ago in a parking lot which caused $3000 in body damage, I haven’t sunk all that much money into it. If I recall correctly, I’m on my second set of brakes, second and a half set of tires, second battery (the first battery lasted over ten years, possibly twelve!) and it still runs pretty good. It makes the odd noise nowadays. The only major annoyance is the hydraulics are gone for the trunk so I need a piece of lumber to keep the trunk open. I may look into seeing if I can get some cheap and swap them myself at some point.
1999 Cougar, I will avoid inserting any bad jokes here!
Kidding aside, I know what you mean about sinking money into older cars. My Mazda is on 2nd brakes, front and back, 2nd tires, almost second everything including the oil pan that rusted out last year. I still think paying $1000-$2000 in maintenance costs is far cheaper than a new car. A nearly new car though might be in my future in another 2-3 years.
Thanks for the comment and good luck with the Cougar!
I have a 1995 Camry and until the last couple years it has only cost bare minimal in maintenance, even now it’s only been about 1200 per year, and what car payment has that? I just ran into a part not being made for it, so I will need to check a salvage yard. I agree that cars are an area that many folks over spend big time. I like lower insurance, lower property tax/registration etc. Not to mention I know this car and can usually tell when it don’t sound or drive normal.
No car payment that I know of Arleen. You’re smart to keep the older car and drive it into the ground. Continued success. Thanks for the comment.